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. Last Updated: 07/27/2016

Citigroup in Loan Syndicate

Citigroup undercut ABN AMRO and Dresdner Kleinwort Wasserstein on rates for a $10 billion loan to Gazprom, Russia's biggest company, to clinch a role arranging the deal, bankers involved in the credit said.

Citigroup, the largest U.S. financial services company, will help arrange the financing for state-owned Gazprom's purchase of a controlling stake in Sibneft, said the bankers, who declined to be identified. The two European banks were forced to match Citigroup's price on what would rank as Russia's biggest loan.

"This is a landmark deal for Russia, so any international bank with a serious intention of doing business in the country should want to be in it," Tim McCarthy, chief investment officer at Red Star Asset Management in Moscow, said in an interview. "Citigroup is a major player in the market."

Citigroup, the largest foreign bank in Russia, slid to fourth place in the $25 billion market for Russian loans, bonds and stocks this year, down from No. 1 in 2004. The bank has been operating in Russia since 1993 and has 1,500 employees and 1,200 corporate clients here.

Michael Klein, head of investment banking at Citigroup, met with Gazprom chief executive Alexei Miller at the company's Moscow headquarters and discussed the "prospects of joint work in securing financing," Gazprom said in August. New York-based Citigroup has not arranged a loan for Gazprom since 1999.

Citigroup's negotiations have earned it a place as one of four banks that will be picked to help arrange the financing, the bankers said. The other banks may include Credit Suisse First Boston, Goldman Sachs and Morgan Stanley.